Bank of Scotland Plc v Greville Development Company (Midlands) Ltd & Ors

The rule in Pigot’s Case is confined to material alterations potentially prejudicial to rights or obligations under an instrument. It does not apply where an alteration merely makes express what rectification would require, because the alteration is immaterial and non-prejudicial. Under Rule 130 of the Land Registration Rules 2003, an accidental omission by a solicitor when drafting a deed may amount to a clerical error. An alteration correcting that omission can take effect without the consent of every interested party. Rectification requires convincing proof of an outward expression of a common continuing intention which the executed instrument failed to record through mistake. A settlement agreement must be construed in its factual matrix, including the complaint or transaction to which the agreement expressly refers.

The claimant bank lent money to Greville Development Company (Midlands) Ltd to fund its acquisition of Cavalier Universal Ltd, whose property comprised two registered titles. A deed of charge referred expressly to one title, but the Land Registry later altered it under Rule 130 of the Land Registration Rules 2003 to include the second title.

The defendants disputed the alteration, alleging fraud, invoking Pigot’s Case, and arguing that the Land Registry lacked power to act without consent. The bank also challenged the subsequent discharge of the charges, the authenticity of documents and leases, and an alleged settlement of the litigation. The principal legal issues were whether the charge could be rectified, whether Rule 130 applied, and whether the settlement extended beyond the complaint identified in the acceptance forms.

1. Charge and rectification. The court found that the parties had a common continuing intention that the whole property, comprising both registered titles, should secure the loan. The executed deed failed to reflect that intention because of an accidental drafting omission. The evidence satisfied the demanding rectification standard in Swainland Builders Ltd v Freehold Properties Ltd.
2. Pigot’s Case. The rule was confined to alterations that were material and potentially prejudicial to the legal rights and obligations under the instrument. The alteration here merely rendered express what rectification would otherwise have provided. It was therefore immaterial and non-prejudicial, so the rule did not apply.
3. Rule 130. The omission of the second title was a clerical error within Rule 130(2)(a) of the Land Registration Rules 2003. In context, a clerical error included an accidental omission by the solicitor drafting the deed. The alteration therefore took effect without requiring the consent of every interested party. The court stated that, if Rule 130(2)(a) had not applied, it would have directed rectification.
4. Forgery and evidence. Applying the civil standard, with appropriately cogent evidence required for serious allegations, the court found that the second DS1 and other documents had been forged by Mr Blundell or under his direction. The approach in Re H (Minors) (Sexual Abuse: Standard of Proof) was applied. Dishonesty in one respect did not automatically require rejection of all other evidence, but Mr Blundell’s uncorroborated evidence was unsafe on the critical issues.
5. Settlement. The complaints handler had actual and ostensible authority only to settle the complaint about delayed statements. Construed in its factual matrix, the amended acceptance form settled that identified complaint, not the bank’s wider claims. The court provisionally declared the charge validly altered, declared the subsequent discharge procured by a forged DS1, and entered money judgments against GDL and CUL subject to the agreed adjustment. Judgment against Mr Blundell was deferred pending resolution of the remaining claims.